Total Supply Vs. Circulating Supply: Key Differences

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Title: The dark horse of cryptocurrencies: understand the difference between total supply and circulating supply

Introduction

The world of cryptocurrency has quickly evolved since its establishment in 2009, many new players who enter the market every year. However, among these newcomers, a concept stands out as a crucial aspect of cryptocurrency dynamics: the difference between
total supply and
Current supply . In this article, we will deepen the key differences between these two important values, providing information that will help you navigate in the complex world of cryptocurrency.

What are the total supplies and the traffic supply?

To understand the distinction between total supply and circulating supply, we first define each term:

* TOTAL SUPPLY (T) : This refers to the total amount of cryptocurrency supply, which represents all coins or chips that have been created or created. It includes not only the recently destined coins, but also the existing currencies that are still in circulation.

* CIRCULATION SUPPLY (CS) : This is the total part of supply that has already been distributed among users, holders and exchanges. It represents the number of currencies that actively use individuals or institutions.

Key differences

Now that we have defined both terms, let’s explore the key differences between total supply and circulating supply:

• Time : Time times differ significantly between these two values. The circulating supply is the current number of currencies that exist in the system, while the total supply refers to all existing currencies.

• Volatility : Supply circulation can fluctuate rapidly due to several market factors, such as changes in users or price movements. This is done by a volatile indicator, while the total supply remains constant, which reflects the actual number of available currencies.

• Inflation : Current supply can lead to inflation, where the existing growth of currencies increases, which makes its value increase over time. However, this is not always the case in cryptocurrency markets, which are known for the volatility of high prices.

• Extension : Total supply is generally more predictable than circulating supply, since it reflects an exact reflection of all available currencies. The circulation of the offer can be extremely unpredictable, which makes it a provocative metric.

Real world examples

Let’s examine two examples that show the difference between total supply and circulating supply:

* Bitcoin (BTC)

: Bitcoin’s total offer is 21 million, reflecting the initial launch of currencies in 2009. Currently, more than 18 million bitcoins are in circulation, the remaining currencies are extracted or transferred of the system.

* Ethereum (ETH) : Although the total offer for Ethereum remains constant in approximately 118 billion, the circulating offer has significantly fluctuate due to changes in the demand of users and market conditions.

Conclusion

Understanding the difference between total supply and circulating supply is crucial for anyone interested in cryptocurrency markets. Recognizing these key differences, it will be better equipped to navigate in the complex world of cryptocurrencies, make informed investment decisions and avoid possible traps. Remember that total supply remains a reliable indicator of the real number of available currencies, while circulating supply can have volatile behavior.

Tips for cryptocurrency investors

To maximize their yields in cryptocurrency markets, consider the following:

* Stop existing currencies : Investment in consecrated cryptocurrencies such as Bitcoin or Ethereum often produces less volatility and greater stability compared to the newest currencies, with uncertain market prospects.